Saudi Energy Minister Says Kingdom Is World’s Energy ‘Shock Absorber’

Saudi Energy Minister Khalid Al-Falih | Reuters
Saudi Energy Minister Khalid Al-Falih | Reuters
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Saudi Energy Minister Says Kingdom Is World’s Energy ‘Shock Absorber’

Saudi Energy Minister Khalid Al-Falih | Reuters
Saudi Energy Minister Khalid Al-Falih | Reuters

Oil prices have risen at the opening of trade Monday’s trading session after Saudi Arabia, the world's largest oil exporter, said it will take the adequate countermeasures to any sanctioning hinted. Later on, Saudi Energy Minister Khalid Al Falih said that the Kingdom remains committed as a key supplier to global energy.

A speculation loomed over the trading floor that prices could be affected by any move the Kingdom might take, but Falih's comments reassured stakeholders.

Added to the official and affirmative statements issued on the Kingdom responding more aggressively to any action taken against it, Falih reiterated that the Kingdom and world economies are closely tied to each other.

Oil prices would be "easily in the three-digit range" without Saudi Arabia's spare production capacity serving as a cushion for the market, he said

Beyond Saudi Arabia’s oil supply, the Kingdom plays a large role in global trade and investment and is home to projects that need to be funded in billions of dollars.

The minister said many factors could affect global oil prices, but Saudi Arabia and other major producers would continue to work to protect the market from any shocks.

"We expect and demand that Saudi Arabia's efforts be acknowledged," Falih said at the India Energy Forum by CERAWeek in New Delhi. "These supply disruptions need a shock absorber. The shock absorber has been to a large part Saudi Arabia."

He later told reporters on the sidelines that Saudi Arabia, which is currently producing about 10.7 million bpd, would raise its crude production next month.

Falih said Saudi Arabia has invested "tens of billions" of dollars to build its spare production capacity.

"Given the disruptions that have taken place, oil would be easily in the three-digit range had it not been for the extra efforts the Kngdom had done," Falih said.

"Saudi Arabia has proactively, deliberately and responsibly invested in its spare capacity."

The minister has said Saudi Arabia can produce 12 million bpd at will, and with current production around 10.7 million bpd, that leaves about 1.3 million bpd of spare capacity.

He said Saudi Arabia would act as "the central bank of the oil market" to help keep supply and demand in balance.

More so, several sources said last week that Saudi Aramco plans to supply Indian buyers with an additional 4 million barrels of crude in November.

India, the world's third-largest oil importer, is suffering from a combination of rising oil prices and a declining local currency. The retail price of gasoline and diesel in India is at record high levels and the government has been forced to cut fuel taxes to ease consumer burden.



Abu Dhabi's XRG Targets Gas, LNG Capacity of 20-25 Million Tons a Year by 2035

Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo
Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo
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Abu Dhabi's XRG Targets Gas, LNG Capacity of 20-25 Million Tons a Year by 2035

Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo
Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo

XRG, the international investment arm of Abu Dhabi National Oil Company (ADNOC), is aiming to have a gas and LNG business with a capacity of between 20 million and 25 million metric tons a year by 2035, the company said in a statement on Tuesday.

XRG was set up last year as an investment company focused on lower-carbon energy, gas and chemicals, with assets of more than $80 billion.

On Tuesday, its board, whose members include former BP CEO Bernard Looney and Blackstone's Jon Gray, approved the capacity target and a new five-year business plan.

Board members also supported the assessment of potential gas acquisitions and LNG opportunities in North America, Reuters reported.

ADNOC's current US investments already sit under XRG, and the oil giant's Chief Executive Sultan Al Jaber said in March that XRG would make a significant investment in US natural gas in coming months.

XRG has also changed the name of its low carbon energies platform to Energy Solutions to reflect the full scope of the company's strategy, including energy demand linked to artificial intelligence and the digital economy, a company spokesperson said on Tuesday.

The board "endorsed the company's ambition to create a top three global chemicals platform," XRG said.

ADNOC had agreed in October to buy German chemicals maker Covestro for 14.7 billion euros ($16.73 billion) including debt. Jaber later said it would sit under XRG.